Tuesday, May 17, 2011

The Pennsylvania Department of Environmental Protection has fined Chesapeake Energy more than $1 million for two separate drilling-related incidents. Under a Consent Order and Agreement (COA) Chesapeake will pay the DEP $900,000 for contaminating private water supplies in Bradford County.At various times during 2010, DEP investigated complaints from residents of Tuscarora, Terry, Monroe, Towanda and Wilmot townships near Chesapeake’s shale drilling operations about contamination of their private water wells. DEP determined that because of improper well casing and cementing in shallow zones, natural gas from non-shale shallow gas formations had experienced gas migration into groundwater and contaminated 16 families’ drinking water supplies.

$200,000 of that amount will be dedicated to the agency's well-plugging fund which is used to mitigate historic and recent gas migration where the source of the gas cannot be determined.As part of this COA, the company must create a plan, approved by the DEP, that outlines corrective actions, remediates contaminated water supplies, and report water supply complaints to the DEP.Chesapeake was also fined $188,000 for a February 23 fire at a drilling site in Avella, Washington County. Three subcontractors ate the site were injured when 3 condensate (wet gas) separator tanks caught fire. The DEP investigated and determined the cause was improper handling and management of the condensate. Under this COA, Cheseapeake must submit for approval a management plan for each well site that might produce condensate.

DEP Secretary Mike Krancer said it's important that natural gas drillers take seriously their responsibilities to comply with state regulations and "that their actions do not risk public health and safety or the environment. The water well contamination fine is the largest single penalty DEP has ever assessed against an oil and gas operator, and the Avella tank fire penalty is the largest we could assess under the Oil and Gas Act."

“We worked in coordination, in cooperation, with the Pennsylvania Department of Environmental Protection, from that moment, to try and assess what the situation was, and what actions needed to be taken to address the situation and correct the problem,” said company spokesman Matt Sheppard. “And we’ve done that with enhanced casing and cementing program.” While Chesapeake is cooperating, the company hasn’t admitted to causing the Bradford County water well problems. Its statement calls a joint company and DEP investigation of the contaminations “inconclusive.”